it's wednesday, october 19th, 2016, "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" here on cnbc. u.s. equity futures, look at where they are this hour. they are slightly negative, despite the fact we did get that positive data out of chain that overnight. the s&p would open down by 2 points. the dow down by 9. the nasdaq opening down by three. let's look at europe right now. largely mixed. the only positive market right now being spain. the rest slightly negative as well. perhaps our futures are tracking that. look at crude. another good day for crude up 1.5% on wti, piercing that 51

doctor p dollar per barrel level. brent up to 52. >> is it still linked to the dow the way it had been in. >> seems every other day. >> every other day. not like every day. among today's top stories, china reported gdp of 6.7% matching forecasts, retail sales rose. urban investment rising 8.2%. industrial output only growing 6.1%. markets in asia overnight, let's see. up on the nikkei, down slightly on the hang seng. and just call it unchanged on the shanghai. back in the u.s., another busy day for earnings and economic data. september housing starts are out at 8:30 a.m. they are expected to have rebounded after falling 6% in august. at 2:00 p.m., the monthly beige book report tracking conditions in the fed's 1 districts. a trio of fed speak today.

san francisco fed john williams, dallas fed president rob kaplan and new york fed president bill dudley. look for results from morgan stanley before the bell. american express and ebay after the close. >> apple is launching a new imac at an event on october 27th, according to re/code. the new models will be on sale in time for the holiday shopping season. updates would be powered by the new sierra operating system, which added some support for the siri voice assistant. we talked about that yesterday. she's needing some work. it needs some work. not really -- >> she's getting there. wouldn't you say? >> no. >> no. >> no. she's -- she's -- >> what has she not done for you lately? >> when i dictate, i say very, very clear -- the third, fourth, fifth time at this point, i'm --

i mean my ps and my cts, the things i'm saying are so clear, anyone could understand it. and she says things. i look and i just end up typing it. she's not even close. >> do you like anyone better? do you like alexis or cortana? alexa. >> i am afraid of alexa even when she's turned off. when i say i made a tee time for 9:30. she puts tea. like i'm having tea and krumpets. >> shares of intel are sliding. the stock declined on intel's guidance for sales, which came in short of where the consensus was. the chipmaker's executive vice

president stacy smith pressing the positives. >> we had a clean beat this quarter. we were higher on revenue. our best ever revenue quarter, up 17% versus last quarter. a 65% gross margin and 18% profit growth. a fantastic quarter. >> smith highlighted the company's success with noncomputer devices and that it aims to reduce dependence on selling chips for pcs. the other big tech name to watch today, yahoo. earnings last night beating estimates while revenues met forecast. issuing a stronger than expected outlook for the current quarter. the core advertising business continued to see declines. we found out from the report that the usage of yahoo's e-mail service has increased slightly since the company disclosed that massive data breach last month. yahoo didn't have the from traditional earnings conference

call this time, but in a statement marissa mayer says she is confidence in yahoo's core business as the firm preparing to integrate with verizon. >> the e-mail portion of the business is one key portion that would be integrated with verizon. that's why we care about that statistic. >> this must be -- this must be sort of your tech -- your "squawk alley" expertise. >> i try to be -- >> i think that the tech savvy -- liesman, you know, he knows about the fed. other than that, i wouldn't -- >> and the grateful dead. if you have a question about the grateful dead. i can answer that. >> if you know a lot about the grateful dead, i don't know what that means if you've been following them for a long time, you don't know whether you've been following about them. >> if you know a lot about the grateful dead, means you killed some brain cells along the way. >> not necessarily. >> their music sounds better if you -- >> some people say that.

some people enjoy it sober. a federal judge in california says he is strongly inclined to approve volkswagen's $10 billion settlement over its diesel emissions scandal. his final ruling will be next week. vw is offering to buy back vehicles and pay up to $10,000 to each of the 475,000 affected owners. the white house and the department of transportation rolling out new rules to spur competition in the airline industry. phil lebeau joins us with the details of a story bandied about on "squawk box" for months and months. >> you don't like the way the airline prices are announced right now? do you feel like you're not getting the full story? >> pretty much. we talked a lot about competition and how competitive the business is. >> let me show you what the announcements are that were made by the white house last night

and officially being announced this morning. essentially it has to do with airfares, how the information is distributed to the public, and how we see those airfares as well as how the airlines report information about certain things, such as how they handle bags and refunds for delayed bags. you will now get a refund for a del delayed bag. if the past you could get a refound if it was lost. if it was delayed a day or two, the airline didn't have to give you the bag fee back. now they'll be required to. they will also have to stop selecting posting of airfares this has more to do with third party firms, whether it's kayak or trip adviser, they don't always post every single airfare. they are telling the airlines you have to give every single airfare. they have to protect travelers

with disabilities and has to be a clear picture of how many bags are delivered, not just a percentage but how many are delivered. the d.o.t. may require also -- this is a possibility -- all in-pricing of tickets. instead of telling you the fare, they with have to tell you the fees, everything added on so it would be priced at a much higher price. they are also studying more transparency in fare details. here's the secretary of transition. >> the actions we're announcing today will help consumers know how airlines are performing. will make sure consumers don't have to pay for services they don't receive and help consumers find the best flight options for them. >> as you can imagine, as you look the airline index over the last year which has been under pressure as the airlines themselves -- the stocks have been under pressure. the airline industry is not crazy about these proposals. in part because when you look at the possibility, guys, of saying

we'll advertise a fare from chicago to l.a. right now they're advertising the fare, not the fees, not the taxes added in. it might say $120. when in reality you'll pay $145, $155 depending on the tax, the airport, what they might be. if they go to all-in pricing the airline industry is saying that makes it look much more expensive to people and may deter people from booking a flight. the counter argument is if i'm paying $155, i should know that's what it is going to be. don't tell me it's going to be $125. >> i want punitive damages for delayed luggage. >> you want somebody's head. you want somebody to pay for that. >> because it happens all the time. my other question, is it always the airline's fault or -- i don't know. i'm telling you, the baggage

handling at newark, just in general, they have major issues. >> the baggage handlers work for the airlines. >> they do. >> unless they hire a third party contract -- >> the whole belt system at newark has been messed up at times. >> now you're talking about a different issue. now you're talking about the infrastructure of some airports in the country. given the number of flights, they're handling so many more flights than they used to, that means things get backed up. luggage gets delayed or lost. >> if i'm going to chicago and bringing a bag on board, my price might be 120 bucks. if i'm checking a bag, it's $145. why is that -- >> correct. >> why does that help anybody? i'm assuming the taxes tend to be included in the ticket price. >> no, no, not what you see advertised. what you see advertised typically is -- here is what the fare is. >> but if i go to buy a ticket the taxes get added on.

>> at the end. they're talking about -- >> but if you're sorting the search results and you wanted to sort by price, the taxes won't be included in that search result. >> but are the taxes different? >> yes. depending on the airport and what landing fees might be and where you're going. >> so that's one thing. >> how many connections you have within there. the d.o.t. is looking at whether or not if kayla is plying from new york to orlando, when she goes on to a third party website or the airline's website, will it say all n here's what you are going to pay, or as it is right now, here's the fare for where are flying. then she has to pick ofigure ou will be another $20. >> is it better to leave the market to itself or better for the government to impose a rule here? >> that's a tough call. you can make the argument that the -- the airlines will make the argument that airlines continued to fall because of competition.

the more regulation you add in here, the more you will ultimately drive up the cost to the airlines. and it could be faharmful to th demand out there in the market. i know people who have booked tickets, when they ultimately get this -- this is more on international flights where you see fuel surcharges added n people are like, whoa, i thought i was getting something for $380, now i'm paying $445, whatever it might be. i understand both sides of the argument. >> i don't think it's as elastic as you make it sound. it's like, would i buy it at 140 and not by it at 160? if you're going to chicago to . l.a., are you going to drive? >> well, the argument from consumer advocates, joe, is if i'm ultimately going to pay 160, tell me i'm going to pay $160. >> but the argument is if it's too high, you might decide not

to fly. then you're deciding not to go to l.a. >> but you might decide to fly into john wayne airport or somewhere else if it's cheaper. >> like any industry, any time you advertise higher prices, you will get people doing stuff. >> i would think -- i tried to drive places recently. drove to ohio. >> with the kids in the car? >> it's not the kids problem? >> you? >> no, just passing people, trucks. you got to be -- you got to be really alert the entire time. it's tiring. >> but you have so much patience. >> is now the time they roll the video of you driving? >> no. no. just -- it's a big car. you know, i just -- you drive, try it, phil, if you haven't done it, in a while, like an eig eight-hour drive. i tried cruise control. >> you can't make that drive to boulder across the country-like you used to?

>> i used to with a '58 ford missing a front of fenderment. >> throw the coors in the trunk because you can't get it out east. >> made it to denver and blew a transmission in denver, once. thanks. >> you bet. solid quarterly results helped the markets close higher. our next guest says what is unfolding here is part of the seasonal reporting patterns. here is explain is eurin timmer. i wasn't under the impression that this earnings season was going so well. it's early, but your view is it will be the same old thing? people have underpromised and overdeliver and we might actually get to a positive. right now we're at minus 1.4%. we might get to positive for the first time in five, six quarters. >> exactly. we have a consistent seasonal pattern where the analysts start

way too high. numbers come down about 800 basis points into the end of the quarter. that's the low point, then it balances by 300 basis points because the companies underpromise and overdeliver. that bounce of 300 basis points right now at the low point, about a week ago, the number was minus 1.6, i think. so we bounce 300 basis points from there, we end up at plus two. last quarter we were at minus 2 1/2, q1 minus 7. i look at it from a rate of change, you see a sequential improvement after five quarters of negative growth that we may see our first quarter of positive growth. that's a good thing for the market and for a market that is bracing for a fed hike. >> that's where i wanted to go next. you answered that. let me set it up. i don't know if earnings matter. i don't know if the election matters. >> they do. >> maybe they do. i think you're right about what matters.

we're in the middle of a paper tantrum is what you're calling it. not tapering qe, but talking about the slightest tightening move, but the market up one day, down the next. up the next. down the next. oil up. there's no correlation anymore. you were asking that earlier. >> yeah. >> it's like been around 50. the market goes up or down based on not being able to get out of its own way because of a quarter point possible hike in december. it's frustrating because it's so meaningless. you think at zero -- when you go from zero, it is meaningful if it's going up. >> when you look at equity valuation, the impact of changes in the discount rate, the interest rate against which earnings are discounted, usually doesn't have much intlufluence earnings are growing at 6%. in the absence of growth, if the

rate goes up, it has a huge impact. at zero earnings growth, if the ten-year were to rise 100 basis points, the market would be 20% overvalued. it's the enumerator and denominator of the valuation model is sensitive to interest rates when there's not enough in the numerator to offset it. it's basic math in a way. the market keeps telling the fed wait until we have growth and then you can raise all you want. the market can handle it. >> people are waiting for the hike, and therefore not doing what they would normally do that's why you argue to get it out of the way. you say they may not do it again indecember. >> the odds are 65% that they will the fed had three dissenters in september. i think if the fed ends up not going in december, they may look back at september as a missed opportunity to take the control

back. like having a dance partner, both your partner and you want to lead. >> nine fed banks wanted to raise the discount rate in september. that tells you where the bank presidents are. >> yeah. remember, the transmission mechanism for the least problems when the fed raised rates last december or when it was going to raise rates a year ago in september was that the chinese yuan was overvalued, that went down. you had the capital flight thing, tightening of financial conditions. this time the yuan de-valued. that's out of the way. i think the market can handle it. >> i have to ask about your notes. you talked about the quality of the earnings has gone down. as a journal reporter in 1999, i did some reporting on the quality of the earnings going down. it was not very long until the market went down as a result in part that they were lousy quality earnings. what's going on with that now? >> 68% of operating earnings are generated through buy backs.

when you look at earnings per share, which is how most investors look at earnings, they have gone sideways for two years. if you look at dollar earnings, they have gone down 16%. the only reason earnings per share have not gone down is because the share count has gone down. the hurdle of generating earnings to keep your eps up is lower. we don't have a good organic growth story. in that environment, it's hard for the market to do well. >> it also means investors should be careful when they see earnings per share growth. >> quality of earnings is not strained. the drop from dental heaven -- you don't know that? >> no, i don't. >> last but not least, before we -- you do love that french -- i love him, right? it's almost like a seinfeld episode. there's a seinfeld episode for every situation. there's a quote from

shakespeare. oh. my question was going to be to you, since you're here. 65%. in the last couple of years, what's the highest fed funds probability that we've had and then disappointed on? >> i look at the front month, it hasn't gotten above -- >> not front. >> out? >> yeah. >> you've been 70%, 80%. >> and when it finally came around we didn't do it. >> december 2015 they were up in the 70, 80, 90 percentile. outside of that -- >> it reminds me of a call option. if it doesn't go up, the time premium comes out of every single george busin sing single -- >> the numbers have gone up and then gone down. on the evening of the fed hike, 70%. >> but many times -- not in the front month but in outer months we've been at 70 and 80 and disappointed. >> that's what i was talking

about the other day, if you look at the two-year, we had to experience the fear and the economic affects of ever-rising rates that never rise. >> yes. >> so the fed should have hiked or gotten off the pot is what i've been trying to say for the last year. we got to go. thanks. coming up, intel's earnings beat the street but the stock trading down because of disappointing guidance for the quarter. we'll go over that with an analyst next.

intel reports a 9% increase in the quarter's results but shares fall almost 3% after disappointing revenue guidance. joining us with more on what this means is chris casso. good morning. >> good morning. >> it looked like a good report. up 9%, the revenue was close in line. >> right. >> the guidance went that bad, right? >> well, it was below where consensus was -- >> a little below. >> right. >> then the market sells off 3%. does that make sense to you? >> does. expect takes had been high

coming into the report. they had positively pre-announced consensus had gotten positive. but i think the more important thing that people looking at, perhaps the bigger concern -- >> just for the radio people. it's off 4%. off 4.2. >> the data center group. specifically enterprise server. the reason why people own intel now is because of data center, not because of pc. >> explain what data center is. >> there's two parts. one is the standard enterprise server that you have. and that part of the business has been the area of head wind. the other part of the business, more than 60%, is hyper scale data center, facebook, amazon. >> right. >> so the key for intel is that's the part that they're concentrating growth. and the issue is, you know, how much of the traditional

enterprise business is cannibalizing that and providing he headwind. >> also some commentary about failures when it comes to keeping pace with the pc chip market? that that continues to decline faster then people thought? >> actually pc, over the last couple of months, pc stabilized somewhat. you know, i think everyone understands that pc is generally a flat declining market at this point. it's actually shown some stabilization over the past couple of months. in this particular report you saw a stronger q3 in pc, but part of the mild disappointment that you saw in the report was the fact they pulled some inventory forward from q4 to q3, which now leaves the question of will that inventory sell through. >> how well is the restructuring going? that's such a huge part of this story and what investors are looking for middle of next year. is everything on track?

>> it is. i would characterize intel management as doing the right thing in the context of half the business is pc, that's not a growing market. so they've been moving their efforts to other things. data center is one of them. also looking at the automotive market strongly. things like internet of things, moving into memory. diversifying the business. part of restructuring and cost structure of that is moving resources out of the pc area into the better growth areas. >> is there too much worldwide capacity in chips? >> not at the moment. there's different segments of the market. >> right. >> and in intel's case, intel's capacity, they are the whole pc market. they usually do a good job of moderating -- matching capacity and supply. in other areas of the chip market we're seeing a shortage. >> let me tell you why i ask that question. one note said that they did some

work on the iphone. it wasn't a profitable business. it looked to me like intel went hat and hand to am rather than with pricing power and with authority just got in and said here, take my chips. >> intel supplies the base band chip, the chip that connects to the cellular network for about half the iphones now. that's a business that qualcomm used to have 100%. it's important for intel to participate in the market. not just because of handsets. the handset market, if you ask intel, they would say handsets are not strategic for them. apple does a lot of their own chips. >> yeah. >> but when you look, think five years from now. the pc that you've got there, probably doesn't connect to the l.t. network. five years from now it's inconceivable that that's the case. every computing device that doesn't connect to the greater network that you can't pick it up outside and use it, that's an

unusable device. i agree, they probably did have to go hat in hand to get that piece of business from ap ple. >> is this selloff right or overdone? >> i think it's right. i think there are other places i want to put my money within the group and for the factor that the pc market being half of the revenue, that's a large headwind. but, again, from an earnings standpoint, stock is about normally valued now. >> thanks for joining us. chris caso. visa hiking quarterly dividend by 18% to 16.5 cents per share. this after the ceo is announced to be stepping down and ahead of its earnings reports on monday. asml reporting a 23% jump in third quarter profit that missed

forecasts. the chip equipmentmaker's revenue beat estimates on the back of higher sales of new machines. asml posting higher than expected new orders. and nissan will reportedly appoint ceo carlos ghone chairman of mitsubishi motors in may. nissan announced it would buy a controlling stake in mitsubishi for 2.3 billion after mitsubishi admitted to falsifying the mileage on several seconds. stand dard and poors revising the outlook for wells fargo going to negative from stable. citing the risks of reputational damage with the whole saga of the retail account sales misconduct. following the announcement wells fargo delayed a ten-year bond, which it will have going today. and massachusetts has suspended

business with the lender. the state's treasurer said she is not convinced that wells has grasped the level of seriousness of its actions or addressed the systemic failures within the organization. >> homestate of elizabeth warren. wonder if there's a coincidence there. >> i don't know how you can grasp it much more. maybe a pound of flesh 679 i'm on the merchant of venice here. do they need an actual pound of flesh? stumpf is gone. >> i can't think of a way that wells fargo could have handled this worse than they did. terrible. >> they don't grasp the seriousness of it. >> it took them a while to get there. don't you think? >> i still love the -- just the -- the politicians, the -- just watching the faux outrage from politicians with what they

preside over in their own daily life. >> what is different about this situation, it's not wonky derivatives, it's something that everybody can understand. it was low-hanging fruit. yahoo -- >> this is like "squawk alley" in the morning. >> pre-"squawk alley." >> yahoo, questions remain about the sale of the company's core assets to verizon. and a live report from vegas where final preparations are underway for tonight's presidential debate. as we ed head to break, here's yesterday s&p 500 winners and losers. guess what guys, i switched to sprint.

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the third and thankfully final presidential debate kicks off tonight from las vegas. john harwood is there and joins us with more. the people i'm talking to, they're wondering whether or not to watch it. if they can actually take another excruciating 90 minutes. >> the key word is thankfully. we are less than three weeks out. i think everyone is pretty exhausted with this campaign. the final debate tonight. we expect it to be as aggressive

a performance from donald trump as we've seen in any of the previous ones. he's significantly behind in the polls. i sat down the other day in new york city with chuck schumer, who will be -- have to work with whoever wins the presidency. he's likely to be the majority leader because democrats are now favored to win the senate. talked to him a bit about the nature of the race. he said that the emotion, the volatility of the race, of key sectors of the electorate has to do with declining middle class incomes. that's put the country in a bad mood, but also has personal relationships with donald trump and hillary clinton. donald trump has been a doenor and constituent. i asked him is this the donald trump you knew over the years in new york? >> surprisingly more so. everyone knew he had a big ego, would like to talk about himself. the extreme of it surprised me.

>> he likes to say when he donates to politicians, he owns them and they do what he wants. did he own you? >> no i don't recall him asking me for something. >> what would be your candid assessment of hillary clinton's laws as a candidate? >> i served with her for eight years. this is the only place where two people in the federal government for sure and most governments anywhere, where two people have the exact same job. we're both type "a" personalities. took us about a year to figure out how to work with each other. then we worked very closely. i'm from brooklyn. i can tell a bs artist pretty good. she is not. she's a straight person in the sense that she doesn't try to say one thing and mean another. i did not find her doing that at all. she's more cautious than i am.

that's her nature. what's who she is. that's not a bad trait for a president with difficult decisions. >> what do you mean by that? how is she more cautious than that? >> i wouldn't even try to tweeze it. >> more scared of political consequences? >> no, a very careful person. very careful. >> so that, in essence, is the two candidates we'll see tonight. donald trump, somewhat more extreme version of what we've seen in past presidential elections, and a careful and cautious hillary clinton who will be trying to protect her lead. john, thank you very much for joining us. >> yahoo is out with quarterly results. the company posting an earnings beat. revenue from mobile, social advertising rose by 24%. questions linger over the company's sale of its core assets to verizon. joining us is ronald josie from jmp securities.

the company did not hold a conference call. they probably thought they wouldn't need to. what questions were left unanswered, though? >> they actually did a good job. the number one question that we thought going into it or we were expecting going into it was did the security breach have any impact, that they announced in september, have any impact on engagement? they provided additional information there. we have context on that. some of the key questions that may have went unanswered is about the trends in the business. results seem similar to q2. search and display are challenged. profitability is somewhat better. core business seems to be what was expected. at least we got information on engagement post the security breach. >> if you're rverizon and parsig results, is this a company you would want to buy? >> nothing changed from a

results perspective. you talked about the mobile business what they call the mavens business, mobile, video, search. it was down 6 taking out accounting issues. verizon knows this. the big challenge is can verizon do a better job out mating and monetizing yahoo!'s overall audience of 700 billion plus users on a monthly basis and therefore the big concern was around the security breach and what that did to engagement. >> mavens was a novel idea when the company first strategized about it. even with the year over year and quarter over quarter gains, it's so small on the scheme of things what do you think the company can actually accomplish in that space given how much of that traffic facebook and google have gobbled up. >> at the end of the day facebook is doing a tremendous

job on monetizing assets and providing tools that assets want. most importantly they have the distribution. when you think about mavens, mobile is the largest part of that mantra, if you will. the challenge that yahoo what is getting the right distribution on mobile. that includes search distribution, having the right apps and the right content for users. one thing maybe taking a step back and talking security breach, if we learned anything, engagement was strong post security breach mainly because people liked to communicate. so male engagement remains steady. reading content remains steady. distribution on mobile is hard. that is something yahoo is challenged and needs to do a better job of getting apps outs there to drive engagement higher a and moneyization should follow. that's something that hopefully they can fix or hope to fix,

particularly if you merge aol into that. >> you don't think this was a situation where the breach gets disclosed, all of a sudden people are saying, wait, i have a yahoo! e-mail address, i should go back and log in and make sure everything is okay, and then reengaging with yahoo properties? or that wasn't nif ofenough of material part of the activity? >> you would think most people who have a yahoo mail account would think i have to change my password. this happened back in 2014. yahoo did not force people to change passwords after logging in again after the breach. unlike ebay, which required everyone to change their password and oftentimes user name, too. yahoo was different. they didn't require people to change their password. it happened two plus years ago. the experience was relatively seamless. i imagine most people changed their password given the fact it

was in the news and people are aware of it. the fact that traffic, engagement and page views across the site and mail has not changed in the several weeks following the announcement, that's telling how important and how sticky communications are and really your networks are on the web. >> good news unless you're verizon and trying to renegotiate this for a lower price. coming up, give your dating life a boost. joe, you listening? tinder coming up with a new way to monetize its dating service. more people could be swiping right on your profile. i don't even know what i just read. >> i don't know -- i don't understand your jokes either. keep going. >> as we head to break -- >> just don't -- >> economists don't be funny. that wasn't an economist joke. a quick check of what's happening in european markets right now.

in other news, facebook wants you to back a political candidate. if you're worried about backlash from your circle of friends, don't fret, there's a way to

limit the audience of who would see your political pick. they also will have an issues tab which will feature quotes and clipspolicy. >> if you don't already know who on your circle of friends are voting, you are not on facebook. >> i'm not on facebook. >> did you see people unfriending each other? oh, he's for this person. i'm not a friend anymore. >> every four years, a good fall cleaning mechanism. tinder is now letting you bump your profile to the front of the feed, but it will cost you. the feature is called tinder boost. it's going live worldwide today. when activated matches within the area will see your profile before anyone else's. the cost ranges from 199 to 399

per boost. >> cheap. that's not bad. >> i wonder what you get. >> front of the line. >> wonder what you get. might just mean people are swiping left right by you. >> steve didn't know -- >> i don't know what you're talking about. >> you don't need tinder. obviously. any way, but you don't -- i guess -- it's been -- becky has -- when she gets all those ridiculous tweeter comments, twitter comments, she knows what it is. >> what it is. yeah. >> just a tech reporter. >> swiping left is good or bad? >> swiping left is bad. >> i will have to -- >> can't you -- isn't it just looking through a catalog or something? >> yes. >> coming up -- let's get out of this china's gdp matching forecasts as retail sales tick up 10%. a live report from beijing up next.

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china out with the latest reading on china gdp. euni eunice yoon joins us with more. >> thanks.

to some economists the numbers today looked a little too stable. q3 gdp came in at 6.7%. that's exact same number as the first quarter. exact same number as the second quarter. that raised some skepticism about the voracity of the numbers. that said, most economists here were focused on the september data to get a better sense of the growth momentum. the industrial output dropped off slightly, but retail sales and fixed asset investment did improve. now, what was driving the growth behind the q3 numbers? well, it was government spending as well as recovery and the property sector. that's because the government has been green lighting several investment projects and infrastructure projects as well as unleashing a record amount of credit. that's helped to lift the housing sector. now, as much as these government policies have helped to support economic growth, there's a lot of concern now that these policies can lead to new danger.

even though many authorities have been trying to rein in those prices with various measures. another concern has been rising debt. they continue to worry about it and in fact, the imf in a working paper said that the government here needs to really address the corporate debt problem. otherwise it's going to face potentially sharply slower growth. banking crisis or possibly even both. guys? >> thanks very much, eunice. all right. morgan stanley reporting earnings. wilfred frost we the numbers. how do they look? >> they look pretty good. revenue $8.9 billion versus expectations of $8.2 billion. 81 cents per share expected at 62 cents a share. where are they similar to goldman sachs? largely on those two beats. also, quote, strong performance

across sales and trading. something we saw throughout all of the other banks. it's a big beat on fixed income and a slight positive performance in equities. so that's a familiar theme for both goldman's and morgan stanley. these guys managed to hold onto slight gains. 8.7% but nice move in the share price there at 1.6% yesterday. they're up 2.6% today. decent performance. more on the details after this break. >> all right. wilfred, yeah. thanks. seem to be learning how to operate in this, finally. >> or maybe the expectations are just low enough. >> exactly. coming up, breaking news on real estate. the latest mortgage app data hits the tape at the top of the hour. so do not leave to go to the bathroom. later we'll get the government's read on housing starts in september. stay with us. at guys, i switched to sprint. sprint? i'm hearing good things about the network. all the networks are great now. we're talking within a 1% difference

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earnings alert. morgan stanley is the latest of the big banks to roll out quarterly results. we'll dig through the report next. fight night in vegas. donald trump and hillary clinton will go head-to-head for the last time. "the wall street journal's" holman jenkins will join us with what he wants to hear from the candidates. plus move over tesla. another high-end electric car is hitting the road and it's veering into elon musk's lane. we're going to go behind the wheel as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box"

here on cnbc. i'm joe kernen along with kayla tausche and steve leisman. we're going to hear from our guest host in just a bit. >> i can wait. >> i'm going to give you my -- i'm going to tell you what i think. then you can tell me whether i'm wrong. then leisman's here too. and kayla. >> thanks for that. >> yeah. the futures -- do we really need to? nasdaq down about ten points. and flat but down, really, over across europe. oil prices were up slightly. morgan stanley rolling out results moments ago. >> so we got revenues $8.9

billion versus expectation of $8.2 billion. a big beat on the bottom line. $81 earnings per share versus expectations of 628 per share. similar to a lot of other investment. and also that comes very much on the fixed income line more than the line. where do they differ from goldman sachs? we saw goldman's underwhelming a little bit there. morgan stanley doing better on that line. where does it do worse than goldman sachs? on the returns line. roe of 8.7%. that's a nice for them but not such a big relative out performance as we saw from goldmans yesterday. on the expense line to hit

they're aiming to cut $1 billion in expenses by 2017. there's some decent numbers in wealth management. slightly disappointing numbers in investment management. not too different from blackrock. overall, we're up about 1% in the premarket following gains of 1.6% yesterday alongside goldman sachs' strong performance. >> wilfred, it's going to be hard for these banks given the numbers they're reporting to complain too loudly. this is pretty good numbers. looks like despite because of or irregardless of the dodd/frank regulation they found a way to make money. >> well, i think that's a fair point, steve. you said with all the banks despite the relatively difficult macroenvironment for the quarter and the pressures you point to, they've all made profits. yes, they've improved their position and actually speaking

to harvey schwartz, the cfo, he did make that point. overall we kind of applaud what the regulators and fed have done. they've done a much better job of course than the european banks which are under much, much more pressure. >> and at higher capital levels. so these banks, many of them are bigger which is a huge issue. but they're less risky given they have more capital. and they're operating according to leverage ratios that didn't exist before the crisis. >> absolutely right. their balance sheets are much stronger than they were. and their returns are better. we've seen deutsche bank do its balance sheet a number of times. but its returns are so low, it has to come back and do it again. that's not the case here. certainly not the case with goldmans and wells fargo which is why they're able to do that. but goldman's the standout investment. they're making returns that a decent and i think we've got to

see a rate hike as a bonus. >> it's one quarter. it's eight years after everything happened. and you got one quarter where -- goldman hasn't had a return on equity above 10%. you don't know what the counterfactual is. i'm talking with leisman with oh, dodd/frank -- >> i'm able to -- >> how about small banks? how about a financial system that's generated less than 2% growth for eight years? >> i'm going with what with wilfred just said. do you want to be the european banks? do you prefer that? >> i don't want to be the european economy either. >> the banks. >> we've never been that economy. >> that's true. thank god. >> doesn't make me feel that great about things. anyway, wilfred. >> better than europe, joe, only in terms of banks earnings. >> yeah, yeah. >> banks in general. >> and rich creamy sauces and wine. you know, there's advantages.

>> chocolates. bread. >> i've been to the coast. i love it. i'm not saying that. i'm talking about the economy. you know? entrepreneurialship. private sector growth. the ability to move from class to a higher class. you know, we're not all born in it, wilf. okay? >> i'm not going to respond to that. >> all right. we're going to talk to wilf a little bit later on as we go through the bank earnings. in other headlines this morning, data on the u.s. housing industry. analysts are expecting a 3.5% jump in september housing starts partially reversing that 5.8% decline in august. also plenty of fed-related activity on today's calendar. john williams, rob kaplan, and bill dudley all have appearances today. and the fed releases its beige book at 2:00 p.m. eastern time. all of that could be market moving. and andrew left has been banged

from the hong kong market for five years. he was found guilty of market misconduct in connection with a research report pub established four years ago and ordered to repay $206,000 in profits. left's lawyer says all appeals options are being considered. all right. earnings, fed speak, all these things could drive markets today ahead of the last presidential debate tonight. joining us now, steven dudash, and our guest host jason trenert. i guess what -- the conclusion i came to i wanted to run by you earlier, jason, was okay we got the election. we're in earnings season. but again, we're watching every data point for this stupid december meeting again and the market has had very trouble making headway. we go up one day, down the next. gone nowhere for months. and i think it's all based on

more waiting for the fed which i think again proous the point they've got to get off of there. get out of our life and let us move on without thinking about them. >> i'm with you, completely. i think the best thing that happened this year my opinion is that japan went to negative interest rates and it was a disaster. to use trump's term. and it showed you the limits of what you could expect. i'm of the view that monetary policy can't create growth. it can just create the conditions upon which you can have growth. it's a very imperfect tool to create economic growth as we've seen. >> if that was the worst that it did, what if it hampers growth? >> you could make the case especially with negative interest rates now that monetary policy has gone from being ineffectual to being harmful.

that's deflationary. people are taking money out of the banking system. the velocity of money has gone down. and the velocity of money has gone down. >> you can get paid to have a mortgage. you can get paid to -- you think maybe you could cause another housing boom that makes no sense if you get paid to -- why not buy a hundred houses and get paid for every mortgage? >> regardless of what part of the political aisle you're coming from, you can very strongly make a case. i think that's where there's a populous movement here. a lot of these have largely benefitted the wrong people. with all due respect to the people watching this program. >> speak for yourself. >> it's not benefitted the average person that has a deposit account. >> leisman will tell you about the counterfactual again. how terrible things would have happened without this stuff. >> why did sanders and trump have done so well. if tha

>> steven, what's your take on this? not you, leisman. >> it's time for the fed to get moving. we've been ready for awhile. it's not completely in their control because we are in a global environment. you've got to believe they wanted to raise rates in the past. our economy's ready for it. our employment numbers are the right spot. underemployment is coming up too. in a bubble, we're ready. but because of japan and what's going on in europe, i think they've been held back a bit. but i'd love to see them get out of it. now that the election stuff is settling down and we have an idea where that's going to end up, between that and getting the policies done, we might finally in e the first time in eight or nine years not have politics driving the markets. we could get back to the fundamentals and the fun stuff of why markets are going up. yeah. it's time. but you can't believe they're going to jump, like, a point or two in the next year. it's just -- they don't have control to that degree to do it. if they did it, it would destroy what's going on overseas more so than the problems they've been having. >> steven, you would think it's

a given looking at what's happened to yields recently having backed up. what's happening to the dollar. and what's happening to fed funds probability. but what are the odds you think they blink and just don't do it? >> they blink? they can't blink at this point. unless there's another brexit event, how could they possibly justify? we've been hitting the numbers they've asked for for eight years. we're there. if it wasn't for what happened overseas over the summer, you got to believe they would have done it at that point. what would their possible excuse be right now? >> take your pick. take your pick. >> i know. but that's the point. we're trying to get them out of the game. they're running out of excuses to be in the game. it's -- they've been artificially low for too long at this point. like you guys said, it's not helping the lower middle class. it's helping the people that can buy lots of properties like you were saying. that's the people who have been -- >> can i just -- can i -- >> must you? >> yeah, i must.

i think it's not right to have a one-sided conversation. steven, how will higher interest rates benefit the low and the middle class? >> i'm not saying it will benefit the lower -- >> what's that? >> i agree with what you're saying. i'm not trying to tell you it's going to magically make their world better. but we need more ammo for future problems. there will be another bump down the road. >> but that's moving the argument from one -- i get that government people have benefitted from the lower rates. but there's been another side to this. it's lower mortgage rates. it's some capital investment that has led to some job growth. decent job growth -- >> but there's been weak capital investment. >> but what we were trying to do. i'm sorry. >> i'm sorry, steven. and i agree with the points you've made. capital spending has been quite weak. i'd say it hurts lower middle class people. >> thrilled with permanent

growth because it's better than the rest of the world. that's what we deserve. that's all we're ever going to get. it's a different world. people are old. and we're never going to do better and we got to live with it. it's not the fed. >> we need to do something though. >> he was talking about me, not you. but go ahead. >> i like you, steve. yeah. thrilled with one point. it's the new normal. why even try? you know, the point you made that's so great, jason, is that these guys if they hadn't seen it not work in japan, those 15 -- how many really there? >> 17 now. >> these 17, they'd be at the next meeting. i mean, if there was any chance of doing something elsewhere they could be part of the solution. this is all on us. it's all what we have to do as the masters of the universe. let's do negative rates. i mean, if they had the slightest idea it worked, they'd be throwing that at us next. >> i think you're right. there's 900 ph.d.s at the federal reserve board.

nothing good can happen. >> exactly. and we're going to break and leisman cannot correspondent. >> thank you. >> let's not do higher education. let's not do higher education. >> it's done so well in everything. >> let's not do -- let's got net smarter. >> a bs and ms and piled deeper. >> piled higher and deeper. >> then ph.d. piled higher and deeper. coming up on "squawk," morgan stanley the last to report. shares of morgan stanley right now, take a look where they are. slightly positive. rest of the group, slightly lower. we'll dig inside the report coming up.

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welcome back to "squawk box." check out the shares of wells fargo. standard and poor's the outlook from negative to stable based on like pr i think. the agency citing the magnitude of the reputational damage from the sales, misconduct. and following the downgrade, wells fargo following the 10-year bond. in other wells fargo news, the state of massachusetts is the latest to stop using wells fargo and a bond underwriter. it's going to be for a year i

guess for standarders. they join a growing list of states and local governments that won't do business with the lender. a suspended business. the state's treasurer says she is not convinced that wells has grasped the level of seriousness of its actions or addressed the systemic failures within the organization. >> and interestingly, john stumpf did have to resign from the boards of chevron and target. that happened in the last day. the companies said it was a personal decision, but he's basically been stripped of all of his titles across the corporate sector. and fbr just downgraded wells fargo a couple minutes ago. cut target to 45. hits keep coming. but morgan stanley is the last of the major u.s. banks to report its earnings. all of which beat expectations. here to discuss is dick bove at rafferty capital. what's the metric at this point

that you think we should be judging this peer group? in the beginning of earnings it was loan growth. now people are talking about return on equity. how are you comparing apples to apples? >> you mentioned two good ways to do it. if you don't mind, i'd like to throw a few facts at you relative to your prior discussion. wells fargo made more money in 2009 because you look at a banks earnings under pre-tax, pre-provision basis that it's made in any year since then and i'll take to 2019 as it made in 2009. goldman sachs hasn't come close to -- >> because dodd/frank has been so great. they're kicking ass, doing wonderful. >> i'm agreeing with you, joe. >> thank you. >> you know, morgan stanley also, you know, had a much bigger year about ten years ago than it had at the present time. you know, the banks have been forced to siphon staggering amounts of money into the u.s.

government directly and through the federal reserve as a result of all of these regulations that they've been throwing at them as a result of velocity of money. and the u.s. economy has gone down consistently year after year, quarter after quarter which has slowed economic growth and banks right now are firing tens of thousands of people and they're getting rid of branches. and if you take a look at what is in the bank earnings in this can quarter, you can't understand what the fed is saying. because banks are sitting here with staggering amounts of money which they can't lend to anybody because presumably the borrowers don't want it. so dodd/frank is having a bad effect on the banking industry. and banks are not making a huge amount of money relative to ten years ago. the other thing that's interest, dictatorship of the fed on the regular side that has basically taken away capitalism. the fed makes a decision as to what the cost of money should be. >> this isn't a new phenomenon.

these companies have had to learn how to operate under this environment for quite some time. >> it's new to say they're doing great under dodd/frank. that's new. >> but we're not saying that. >> yeah we did. >> yes, you did. >> that's what -- >> the stocks have gone up. the street's -- >> the stocks have not gone up. i'm sorry. the stocks have not gone up. just because they went up, you know, in the last couple of years doesn't mean that they've gone up over a ten-year period. you know, you're not -- if you bought goldman sachs, wells fargo, and morgan stanley ten years ago, you wouldn't be sitting on a huge pile of crash. >> because you'd be buying them into the financial crisis. >> whether you bought them into the financial crisis. whether you bought them a year and a half ago, you wouldn't be sitting on a huge pile of cash. basically the change in e the return on equity in this business, the massive amount of excess equity which is not needed. the massive amount of liquidity

which has created a liquidity trap. it's all there. and the fed, you know, not only does the fed set the price and quantity of money. but you've got relatively 200,000 people in the united states that are employed to make sure that the banks do what the fed tells them to do and the fed tells them what to do about everything. >> regulators are jobs, right? >> well, that's right. they're in the banks and they're in the government. but the fact is, what they've done to the banking industry is they've nationalized it. and not only have they nationalized it. but nationalizing it, they've stopped the growth of private sector lending because the government is grabbing all the money that the banks are taking on. that's not good. >> dick, on wells fargo specifically, we could debate for hours about dodd/frank, its implications for banks. you were the first bank to put

accelerating after the sales scandal reached a fever pitch. i'm wondering if you think the bottom has been put in the stock or if you think there's more pain. >> no, i mean, wells fargo is not making money. that's the bottom line. if you want to look at the company over the past ten years, you can see what they did is they bought wachovia in 2008. they put a huge reserve up in 2009. and from 2009 to the present time, they've been reducing that reserve. but they're operating earnings have not gone up. what did they do? they panicked and put on this extreme sales program to get revenue from that side. because their net interest margin is less than half today of what it was, you know, ten years ago. but the point is because they weren't making money, they went out and did extreme things. now the company has to be restructured right from the base. >> okay. >> i just want to go on record.

dick, i have known you for a number of years and i think the world of your analysis and we mostly agree. i think that regulations have gone too far. but i think where we disagree is i think it's better that the banking system operates with more capital than with less capital. and i think we're in a better place now for that particular reason. >> that would have been one page instead of 16,000 pages. >> fair enough. and leverage ratios. >> well, you know, if you want to get into the capital thing, take a look at the end of the 19th century and you'll find that so much capital was put into the banking industry that we had depressions in 1873, '83 '93 and 1907. and no credit coming out of the sector. >> we'll see you soon. >> thank you for coming and as always, we think you're one of the best bank analysts out there. coming up, more frappuccinos and lattes coming to china. we're going to tell you why. "squawk box" will be ragt become. lac pays cash.

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welcome back to "squawk box." among the stories front and center this morning, crude oil prices are rallying after the american petroleum institute reported a drawdown in inventories and saudi arabia's oil minister said market conditions were improving. microsoft surface tablet computers have received what one might call a celebrity not endorsement. >> great story. >> new england patriots coach bill belichick said he won't use those tablets on the sidelines. he said they don't perform consistently. microsoft says it stands by the reliability of the devices. he says he's been bilked out of profits for years from the classic comedy film "this is spinal tap."

in addition to damages, he also wants control of the trademarks for the spinal tap name. you could say he's taking the lawsuit to 11. >> yeah. no? >> yeah, no. but how did -- what happened over there? i mean, with spinal tap? how did he not get compensated? >> i haven't read the filing. >> i thought it was going to be about the simpson. the simpsons are going to pass gun smoke. >> the most episodes ever. >> what was the number? 600? >> yeah, it did already. >> it did? >> i thought it was this week. >> little joe. >> little joe was bonanza. >> i tried. >> peter phelps, mr. phelps' brother. no, michael landon. >> all right. they told me to jump in.

i'm trying. >> can you help with this? >> it's hollywood accounting. where it's like a movie can gross a billion dollars then they say for actor purposes it only earned $89. and that's what happened here. they said the movie over that 20-year time frame only earned, like, $89. so that's the battle. >> all right. glad you were here. >> what do you know about that? >> i'm a big spinal tap and simpsons fan. got to know these things. >> you think simpsons are still funny? >> the writing is great. >> used to watch every episode. haven't watched in a long time. >> homer's my idol. homer and al bundy. some combination of the two. three weeks until election day and the candidates will be spending more cash on attack ads. really? we want to look at how much donald trump is spending out of his own run for the white house and robert frank is going to join us.

you know holman jenkins is going to be on a little later. his point is that, you know, he hasn't spent enough. and his heart hasn't necessarily been in it as much as holman wishes. >> hooefs always been a careful investor of his own capital. that's what has made him what many say is a great business person. when you look at when he announced his run, he said he will spend up to a billion dollars of his own money. as of yesterday that number was down to $100 million. >> remember by the time this ends i will have spent over $100 million on my campaign. hillary spent nothing. she gets all her money from the special interests and donors. >> all right. so went from a billion to a hundred million. how much has he actually spent so far? according to the federal election commission filings, trump has spent less than $60 million of his money through september. now, take a look at this chart. his own contributions to his

campaign have actually been falling over the past six months. now, in the first quarter he was giving his campaign more than $5 million a month peaking at $11 million in march. july and august, that was down to $2 million a month. now, even trump's $60 million may be slightly overstated because his campaign has spent more than $8 million to reimburse trump-owned or trump-related companies. so some of the money he's spent on his own campaign will go right back to his businesses. he still has 19 days left to go from $60 million to $100 million. of course as he said, hillary clinton hasn't spent any or certainly a small amount of her own money. mr. trump's contribution has covered the cost of any reimbursement to him or his companies. and quote, he has contributed an unprecedented amount to his campaign. it's not exactly unprecedented. let's take a look at who has spent the most in presidential races. ross perot spent $64 million in

his '92 campaign. steve forbes spent a combined $70 million for his runs in '96 and 2000. and michael bloomberg running for mayor spent $160 million. >> what about jon corzine? >> $60 million. >> that was the most expensive for a senate race. romney used $45 million in '08 of his own money. but next to nothing in 2012. >> interesting. robert, great report. >> ross perot. thanks, ross. '92. thank you for doing that. we appreciate it. thanks. we're still living with that. thought about that the other night. we owe you. coming up, "the wall street journal's" holman jenkins here

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welcome back to "squawk box." third and last presidential debate is tonight. donald trump says the election

is rigged. joining us now holman jenkins of "the wall street journal" who writes twice weekly business world column. his column this week is called "rigged was hillary clinton's fbi case". anyway, i was going to -- i'll intro it a different way. when do you write your pieces typically? when did you finish this one which i loved reading this morning? when did you finish it? nighttime? >> no, it was probably early afternoon. i start the day writing an article about the nfl. decided it was the wrong time. >> i read it this morning and looked for, like, i wanted to throw back a couple of shots. i got to so depressed reading it. when you write something like that, do you throw a couple back because it's so depressing what you just wrote? >> no. >> the conclusion you come to

here, i guess, over 90% for hillary. a lot of people are assuming it's going to be hillary clinton. you're saying don't look for any great period of prosperity to be ushered in or political harmony to be ushered in for four years. it's not going to be fun under this government. >> yeah. i'm in a pessimistic mood about that this week. all these leaks and information coming out about the fbi investigation and the thing bs that went on there. basically there's going to be leaks and more subpoenas. and this whole server issue will drag into the administration. >> it's not reagan or not going to be a hopeful -- not even hope and change. it's going to be like nixon. >> especially because republicans have to keep all those trumpistas on board.

>> what happened with jim comey? have you figured that out yet? >> there are a lot of important people who didn't want hillary to get charged. obama. loretta lynch the head of the justice department. as it played out and there are probably a lot of reasons for this i'm not aware of, but it all came to a fruition just before the democratic convention putting it all on the head of the fbi to point out the nominee against donald trump. is he going to do that? >> is it possible he said he was john roberts and i'm not going to put myself in the position of getting rid of the democratic nominee and this is for the good of the country. i'm a bigger person because of it? it's not working out for him. >> yeah. and any fbi chief would not want to do that during a presidential election. >> your point in the piece is also that trump talks about finally showing some heart and why he's doing this. but in your view, he has not.

he hasn't bought enough advertising time. do you think that he's -- he was not going to blow his fortune or businesses and buildings in order to fund presidential campaign to the tune of a billion dollars. decide to run a cheap campaign that flies from rally to rally. that doesn't reach the people who aren't your natural followers. who are sitting on the fence. you have to put out tv there that give them a picture of you as president that they find okay. he doesn't want to spend the money to do that. >> it's not like he has stupid people advising him at this point. so they probably have been urging him to do that. >> and there's been outside people who wanted to raise money to do that and have gotten no encouragement from the campaign. >> it's not about launching trump tv afterwards, is it? it's not some machiavellian -- that's always been in the back of his mind? >> i don't know if he ever

really wanted to be president and serve in the job. but the whole point of rigged is this is an argument you can continue afterwards. >> how do you defend democracy and our democratic process on november 9th? >> oh, i think a blowout will take care of that. oh, our system has shown we cannot count votes down to a narrow margin of error as in florida. but it's a 5% or 10% win for hillary, who cares. >> your column was great with the idea you could have a candidate potentially win big and yet have no mandate and yet have her presidency mired in investigation. nothing is solved by this. i was very disappointed hillary took no step at all to the right. she continues or continued to run the election campaign as if she was running in the democratic primary. >> yeah. i think that's -- >> never pivoted. >> every time i hear one of these debates, i hope to hear her say i'm sure me and paul ryan could get together and make

things happen for the country. if she did that, i think she could quash a lot of this. >> talk about entrepreneurship she doesn't do. it's like it doesn't exist. >> is there any reason to think that she suddenly feels the nobility of serving as president and -- i don't -- >> i think she's trying to win the house. i think she's going for running the table. >> is it for her legacy or does she actually want to help the country? it seemed the 30-year history of the clintons and what it's all about serving, who it serves. >> when democrats do good things when they're in power. >> so it's not just self-serving and corruption and everything else we've seen the last 30 years? >> people can justify anything, basically. >> all right. see you in a couple weeks or next week. makes me want to -- need a drink. programming note. catch all the action from the

third and final presidential debate tonight right here on cnbc. coverage beginning at 9:00 eastern. coming up, a new read on the state of real estate. we'll dig inside the mortgage numbers. that's coming up next. ♪ for decades, investors have used a 60/40 stock and bond model,

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rising 0.6% last week, the mortgage apps. no one knows more about it than diana olick. she joins us now with a closer look at today's data. diana? >> well, steve, thanks for the intro there. there are plenty of things scaring homeowners but interest rates are not one of them. take ka look. mortgage application volume eked out a 0.6% gain ending october 14th. that compared to the previous week. this despite climbing interest rates. now, the 30-year fixed rate averaged 3.73%. that's for conforming loan balances with 20% down. that's the highest rate since june of this year which was right around brexit.

mortgage applications seasonally adjusted and are now higher than the same week one year ago. there are more mortgage dependent buyers in the market compared to a year ago. and that may count for the increase in applications. investors who largely use cash have been slowing their purchases this year overall. as for the refis, refinance applications fell 1% from the previous week. seasonally adjusted. but they're still up 20% from a year ago when rates were slightly higher. housing starts will be out and we need more single family housing starts. we've got demand. >> that's right. joe introduced the concept of elasticity, the economic concept. we can use that and i won't be blamed for being the geek on the show. so what about the elasticity of mortgages to interest rates

versus the elasticity of mortgages to jobs? and i would say that you're much more likely to have people come out because they want jobs on the mortgage rate. >> it doesn't have to do with the mortgage rate. really what it has to do is that home prices are rising far faster than income growth. and the mortgage rate popping up. nobody's expecting rates to go over 4% any time soon. what it really has to do is that home prices are rising so fast right now because of that supply issue. that the rates aren't really mattering as much. also, it's mortgage availability. i can quote the 3.73% and say that's fabulous. but if you don't have the right credit score and you don't have the 20% down. you're not getting that 3.73%. you're getting something higher. >> okay. thank you very much. coming up on "squawk," the morning's biggest movers.

plus a car that is back from the dead. phil lebeau takes a ride in the hybrid called the karma. but will it survive a very competitive road? that story's up next.

the world awaiting another announcement from tesla and elon musk. in the meantime, our phil lebeau got an exclusive test drive. so it is a hybrid.

a new luxury hybrid from an automaker. so the karma, stupid name is about if you get good karma. >> that's a -- i'm sure they're watching you right now and love hearing you a call it a stupid name. >> that's the whole idea. this thing. huh? >> let me show you the car before you say anything else, joe. remember the karma it was an electric car that was built in 2012 and a lot of people said let's have -- well, that company went bankrupt. but coming out of that there is a new company. it was basically who bought the assets of the car pa. and now this is the first model. it is the rovero. if it looks like the fister karma, it's because it largely is. there's been slight tweaks. but generally speaking it looks close to that.

price will be $130,000. it is expensive. it's an extended range electric car. not a hybrid. the target buyer also has several other luxury models. it's probably one of several that you have in your garage. the reason that we're showing you this is because we want to g back to 2012. so remember the fisker karma? there are only about 2,000 that were built. but they had a passionate if not somewhat strange collection of fans, if you will. people who said it was a great car even though it had poor range. when the company went bankrupt, people thought that's it the karma's gone for good. now there's a second version of that, if you will. >> we're bringing a brand back. you know, it's a renaissance of some degree. there were a lot of passionate owners that bought these vehicles for a reason. the reason is the car is

gorgeous. and the electricification of the vehicle is good. with success in a short period of time we can replicate that discuss and then some. >> they will start delivering the first reveros. there is a niche audience who found the fisker karma attractive and they'll find this attractive. that is a sneak peek. >> you know, karma, it depends on whether it's good or bad, number one. >> that's right. >> definitely a word that you can depending on the situation you say, whoa, that's karma. and that's usually bad karma. so i'm not sure that -- you know, if they need another name for another model, how about the karma chameleon. the karma karma karma chameleon. huh? remember that? we're going to play that on the

way out if we can. >> a little boy george. i would love to hear that. >> if they do have another model, steve, it's ready. for that name. >> you want me to bail you out on this joke? >> if you can bring up boy george in any context, it's worth it. >> can i ask what the range of the new car is? phil, still there? >> i believe the range is going to be close to 250 miles. >> about tesla competitive then. >> it's extended range electric which means you've got the gas assist engine which then powers the motor for the electric vehicle. >> so good karma while you're electric. bad karma -- >> usually use as a positive term. >> right. but when you go too far, then the bad karma kicks in when you switch over to the gas. when you switch over to the gas power, then you feel bad about

yourself. okay, phil. thank you. what's coming up, steve? >> i'll tell you. your money, your vote. senator mark warner is going to join us with what is expected at the debate. plus the repercussions of concussions. joan weill is here as we learn more about the long-term effects of head injuries. we'll be right back. i got it, dad. ow! ♪ we love to keep them safe. so we made the nest protect smoke and carbon monoxide alarm. it speaks up and can alert your phone if there's a problem. or let you know if everything is just fine. because, ya know, we worry. ♪

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a showdown just off the strip. hillary clinton and donald trump get ready to square off in las vegas. senator warner joins us on the "squawk" set to talk presidential politics. morgan stanley becomes the latest to beat the street. we'll go beyond the bottom line. plus key data on housing as the final hour of "squawk box" begins right now. ♪ live from new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc. i'm joe kernen along with kayla

tausche and steve leisman. the equities indicated -- the dow up five. the s&p down 0.6. there's the 10-year. i don't know, leisman. this is something we haven't talked about. >> i wanted to talk about it. now we're back down. same with the 2-year. the 2-year was up at 88. >> whether we go -- do we go back under 1.5% or above 2%? >> your buddy mark grant. >> i know if i could just know one thing, though. i don't even care who wins the election. >> i don't think it matters all that much. >> really? if it goes back down below 1.5% with that means that this is all a fake start for this supposedly

recovery we're now in. people started talking about a recession not being out of the question. >> do you think that says more about what's going on here? >> i don't agree that the 10-year has this define ability to figure the future out. >> the fed has been so involved. of course the 10-year used to be an important thing to pay attention to until the fed started buying 60% of -- >> but 2%? >> as a matter of fact i think it would be good for the economy to the extent to which the yield curve would steepen. >> it would be good. i just want to know whether it does. if you could tell me -- i'm not optimistic about what that would mean. >> it would be a bad sign for the economy. >> don't you think? and i don't think it's -- i don't think we can blame it on the rest of the world anymore. it's going to be dependent on -- >> about the election, how it reacts from the election.

>> she's in charge now? >> a key economic report now 30 minutes away. september housing starts are due at 8:30 eastern. they're expected to have rebounded last month after falling it'll be 6% in august. speaking of housing, mortgage applications were up. applications now 18.5% higher than they were a year ago. we'll stay on the economic theme here. this afternoon we'll get the monthly beige book report. that tracks conditions in the fed's 12 districts. also worth watching a trio of fed officials. john williams, rob kaplan, and bill dudley. a few of the stocks we're watching this morning. morgan stanley beating the street on the top and bottom lines. among the positive factors, a surge in bond trading activity. stock still up about 1.2%.

intel's latest results, shares under pressure because apparently the street is disappointed over data center business growth rates and some guidance that the company gave their stock is off 5%. and halliburton posting a surprise profit of 1 cent per share compared to analysis of 6 cents loss. stock up 1.5% premarket. and we're watching oil prices this morning like every morning but maybe a little more. the energy information administration is going to release official crude and fuel storage data at 10:30 a.m. eastern. data out late yesterday showed a drop in u.s. crude stockpiles. okay. now to politics. third and final presidential debate is just hours away and you'll be able to see it live on cnbc. that begins at 9:00 p.m. eastern. john harwood covering the main event. he now joins us from las vegas. john? >> reporter: it's windy in las vegas, steve. we're going to have a lot of

wind in this debate a few hours from now. final 90 minutes, we've had two presidential debates. one vice presidential debate. want to step back and set the scene of where the race is now. you look at the real clear politics averages of recent polls among likely voters. they tell a consistent story. you've got hillary clinton in these averages just over 46%. in our poll she was 48% in a four-way race. in the mid to high 40s. you've got donald trump at 39%. that's a level he's had a tough time getting out of. he hasn't topped 40% in most polls recently. then johnson and stein. let's take a look at the sources of the lead she's built which is now more in the clear politics average. first of all, the key thing is college educated white voters are favoring clinton narrowly. that's usually a republican group. you look at women, substantial

20-point advantage for hillary clinton. voters under 50 years old also a 20-point advantage. huge advantage among non-whites, almost 60 points. and among voters in urban areas, the major cities and the immediate areas around the cities, hillary clinton is also having a significant lead of 30 percentage points. those are the barriers that donald trump who's got strength in the south among rural voters, among non-college white voters. but those have not been enough for him. and we'll see whether he can do anything to expand his base. he hasn't lately been acting in a way that looks like he's trying to expand the base. but we'll see which donald trump shows up tonight. >> john, thanks very much for your coverage this evening. joining us to talk more about the election and the challenges facing washington, virginia senator mark warner who has endorsed secretary clinton. i want to have a real meeting of the minds here, senator.

because i wish you had run -- you know, i register as an independent. but as far as democrats go, i always liked you. even 90% you vote party line most of the time. but you're a private sector guy so you understand the private sector. and i think you're a public servant. you don't have to do this for personal self-enrichment. not calling out anyone else that may have done that. but where we are as a country right now, are you at all depressed, pessimistic? how did we get to this point? i don't know who finally wins this election. but the democrats had to run hillary clinton, even in the podesta e-mails said we better hope for trump because she's not going to beat anybody else. even in those e-mails they cop to that. >> this is somebody who's got 30 years of service to our country. you said at the top of the hour the thing that you cared about more than even the results of the election were where the spread was going to be on the

10-year. i can tell you this much. you want the answer? elect trump and see 70, 80, 90 basis point drop. >> that wasn't what i meant. i just meant -- no, no. >> i'll give you your answer. >> i said give me one data point -- >> you're moving further from a meeting of the minds. go ahead. >> no, no. to judge where we're going to be economically and marketwise, i said it's more important for me to know where that is than who wins the election. because i think, you know, that's sort of -- >> but i do think marketwise, the disruption that this guy would bring to the markets, to people's faith in our institutions, not just the electoral system which he is trashing. >> hold on. no, no. i don't need you to do it for me. because let me -- here's what i'm -- okay, fine. so we get stability with hillary clinton. and the markets don't freak out. so it's almost like, you know,

saying that the united states has the best economy based on the rest of the world. okay. we can do better than this. and just saying, well, it wouldn't be as bad as trump to get hillary clinton. half this country -- you know what half this country feels about take either candidate. take what half the country feels about trump, think about him as president. take half the country how they feel about hillary clinton and have her as president. why are we as a country to be in this position for the next four years? >> i think in hillary clinton we've got somebody who's got a 30-year record. you get dinged around. but she's got -- >> even when you say 30-year record. i'm thinking criminal record. i know people with criminal records for 30 years. just because they have a record doesn't mean it's good, senator. >> go down her policy list. >> i don't know what it is. she's changed. >> you can go through her plans on structure. listen. i support tpp. >> does she? do you know?

i'll bet you she does but we don't know she does. >> as a long-term advocate for trade, i think we've got to acknowledge and i can point to parts of my state where after nafta communities got left behind. we have never done anything -- >> i tried buttering him up. you go ahead. >> you're talking -- let's talk about policy. >> private sector guy. >> let's talk about policy. how do we get a trade deal den d.o. snen. >> your candidate is against it. so why are you selling this to me? >> if we're going to get a trade deal done, we've got to look at the communities that have been left behind. if we believe our own rhetoric on trade, it's going to add a trillion dollars to the economy. we need to do more than $5 billion on taa. again, i think that means there's a reset. i think all of us who have been in the private sector need to realize there's a lot of fundamental transitions going on in this country. >> i have a more fundamental question than trade. before you get to trade, how do you govern? and this is really the issue.

part of the problem of governance is going to come from the republican party because it's not entirely clear what that is right now. another part comes from the democratic party because there's this very strong left which hillary clinton continues to cater to. we had holman jenkins here with an awful but very plausible theory that this is four years of investigation. four more years of gridlock. have you thought about -- because you're a thinking man. how does the next president of the united states govern the united states? >> hillary clinton has had a record both particularly in the senate where she was willing to reach across the aisle and get things done. the truth is -- and this is one of the challenges -- >> what about the hatred, the opposition that joe is talking about? >> that's where if in the first ten months of a clinton administration we don't put some points on the board and show the country can move forward, then yes, you've got a right to make these critiques. but the notion is when the frustration comes from trump and bernie sanders saying the system

is rigged. when you've got a candidate for president that's basically denigrating the whole integrity of the electoral system. with congress earning its 8% approval rating. let me just finish this thought. if we don't find a way to move some forward progress and i actually think clinton has got a record of showing she -- >> she talks nothing about raising taxes on business when she gave us her hallmark economic speech. barely mentions private only in passing. and doesn't take a step to reaching out to -- there are many people out there looking for a reason not to support donald trump because of things he's said. and she's given them no reason to come on board. >> i think you'll see that tonight. if she continues to let trump be trump, the first two debates that's worked well. >> go ahead, but, clinton foundation, none of that? you've seen the underbelly of all the stuff that's gone on for

the past eight years from zero to a quarter of a billion dollars. none of that bothers you ethically? >> clinton foundation makes sense. you've had all this, where's your smoking gun? >> may i ask a question. i grew up in a democratic household but i'm a private sector guy and a republican now. and the -- >> i grew up in a republican household, i'm a private sector guy and a democrat. >> but the democratic party has changed dramatically in my opinion in terms of -- i think a lot of people look at things through the prism of ethnicity, gender, social things. the real issue it seems is the middle class. as a democrat, do you think the democrats have abandoned the middle class? it seems like it's a class of professionals. of elites. and i think some of the things that have been revealed and some of these wikileaks is there's a disdain for average people. i mean -- >> that's not the democratic party that i believe i'm part of. >> okay. >> i think there is a pro-growth part of the democratic party

which i'm proud to be part of. >> that's how we started the conversation. there are elements of the -- where are they? where were they this time around? >> i think there are a slew of us. i think that you will see that you've also got to balance that with the fact that with the level of discontent, as somebody who believes strongly in our system, something is a little strange around modern american capitalism. when you've got this tremendous focus on short-termism versus long-term value creation. i think that's a different capitalism than i grew up in when i started by businesses. >> you acknowledged the need for clinton. you say she needs points on the board in the early days of her administration. what's even possible for her -- >> infrastructure. i think there is an enormous recognition across both sides of the aisle, you've got donald trump talking about infrastructure. he's going to make all these things great. he never explains how he's going to pay for them. >> you don't think infrastructure is code for

indiscriminate spending? >> we've got variations of the old infrastructure bank, democrats and republicans wondering why we're not taking out -- >> we've got to go to break and we also have a good song to bump out with here. but before we get to that -- >> is boy george back? >> before we get to that, can you -- i mean, pretend the camera is not on. whisper it to me. will she really do tpp? will she bring back the money from abroad? will she do things her husband would have done in 1992? >> i think you'll see a renewed effort. i don't think you're going to get a trade deal done without a recognition that we've got to do more for communities and people who have been left behind by trade. i say that as a trade advocate. i also think she's got a record that she'll work with people on both sides. frankly, we've seen none of that. we've seen trump not even willing to work with his own team. >> a lot of people think she

should have a record. >> yeah i support that after trump said he wanted to have a repatriation tax. >> we're going to get to -- the senator's from my generation. knew exactly -- was i right? the karma chameleon. >> i was just wondering whether you made that up. >> made it right up. >> that's why you dominate this morning. >> team of writers. >> begins at 2:00 the day before and they start giving him jokes. >> what about the karma kardashian? that'd be a good -- coming up, i'm the one who has to suffer and read this over boy george. former secretary general anders rasmussen joins us. we'll get his take on the candidates' foreign policy plans and tour the world with him. and tonight don't forget you can catch all the action from the third and final presidential debate right here on cnbc from las vegas. begins at 9:00 p.m.

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to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california. welcome back to "squawk box." a report in "the wall street

journal" says salesforce considered 14 possible acquisition targets back in may included adobe with a $54 billion market cap. and linkedin, but not twitter which was conspicuously off of that list. the list of potential targets comes from hacked e-mails from former secretary of state colin powell who sits on the salesforce board of directors. in a statement salesforce told cnbc they landscape across a wide range of companies but acquires very few. adobe is the one people are picking out of this not only because it's so big but because other companies on the list have already been acquired. even in that time. >> i think what we should all do now is preemptively release all of our e-mails. right? so there won't be any discoveries anymore. that all e-mails are just public. what do you think? it's getting out of hand. >> good old fashioned phone conversation. >> i don't have any exemption to privacy anymore.

i think that's long gone. >> like you put in an e-mail you got to read a few times. >> let's get to wilfred. now back to morgan stanley. wilfred frost just getting off a call with the company's c fo. are you willing to release your e-mails? >> i came off the back end of that conversation but no my e-mails will stay private. let me talk about the stanley numbers that were beat significant lip. he said it was a solid quarter. he, quote, feels good about the results that but they still have more work to do. let's explore some of that work. their 2017 target is 9% to 11%. he said they need more client conviction and confidence to hit those targets. but did really make a clear difference to what most of this year has been like compared to january and february. and clearly things have improved since then. in terms of the competitive position that they have, he said

they've got good momentum, strong global footprint. we talked about the fact that the beat was led in trading revenues, asked about whether they were making, taking market share and on that he just said you can't comment on market share of a specific quarter. but we feel confident that they can accrue share over time. very clear key to emphasize their number one global position in equities. i asked whether brexit was an opportunity. wouldn't really be drawn on that. but did highlight that most of the global banks are headquartered in new york. we did ask about investment banking performance. of course they were pretty much in line for the quarter. little bit better than goldman sachs for that. and he felt that so far the momentum is good. advisory had helped the overall banking performance and that pipelines are still healthy. but too early to ask about q4. i asked about value act. of course the stake -- the activist hedge fund, there was

no comment on that. and also asked about regulation. fear of regulation picking up off the back of wells fargo scandal. they're conducting a detailed review to confirm they are following their best practices. something he said you would expect us all to do and continue to review those. but didn't feel there was anything specific to bring up in terms of notifying or finding anything of any wrong doing at any point. guys? >> thank you, wilfred. >> all right. thanks. now back again to politics. the next president faces a number of global challenges including frosty relations with russia. one former nato secretary general says the next american president should act as a global policeman to restore world order and bring peace in. anders rasmussen who served as both nato secretary general and danish prime minister, author of the new book "the will to lead."

secretary, it's good to see you this morning. and this point has been made, i guess, and usually it's made in light of what some would see as kind of a retreat from the united states' responsibility or at least the way america had acted in the past. maybe we haven't been acting quite as outgoing with these things as we have in the past. is that your take on this? >> yeah. i want to hear the candidates tell us how they want to promote global trade and economic growth. how they will counter putin. i think the american relationship with china is much more important than the candidates' relationships with women. so what i would like to hear tonight is how will you exercise determined american global leadership.

>> yeah. that -- that has been -- just thinking about berlosconi. so the relationship might be more important than the relationship with women. that's a whole new concept. do you mean, mr. secretary, in terms of a military adventurism as well as or are you talking about trade for the united states to lead? because in terms of militarily, there are some people who think we have disappeared from the leadership role. >> i fully agree. you need a strong american commitment. both economicicly and militarily. economicicly i'm concerned that

both candidates have -- and also the transatlanta trade and investment partnership. because this is not to introduce productionism and isolationism. on the contrary we need more global engagement. also when it comes to the military. i do believe that the best way to facilitate. >> only spending 2% of their gdp. the u.s., uk, and estonia, pole land, and greece. so isn't it a two-way street?

there are other countries that might need to take more responsibility for their commitments to nato. no? >> absolutely. i fully agree. the europeans should pay a bigger part of the total bill for our -- we decided that all 28 allies will within the next decade reach the 2% edge more in defense than they did in 2015. so of course the united states shouldn't act alone as the world's policemen. you need someone to help you. that's why in my book i suggest that the next president will

convene all democratic leaders from the whole world to establish an alliance for freedom that can counter the still more aggressive autocrats like mr. putin. >> i do think both candidates are probably more hawkish in those terms than the last eight years that we've had, probably, mr. secretary. we appreciate your time today. thank you. >> thank you. breaking economic news coming up. we'll be right back.

we've just been hearing so much about how you're a digital company,

yet here you are building a jet engine. well, ge is digital and industrial. like peanut butter and jelly. yeah. ham and cheese. cops and robbers. yeah. nachos and karate. ahh. not that one so much. the rest were really good. socks and shoes. ok, ricky...

all right. september housing starts hitting the tape. rick santelli standing by at the cme in chicago. rick, drum roll. the numbers? >> 1.047 million seasonally adjusted annualized units. that follows 1.15. so obviously we're back tracking a bit. as a matter of fact were back tracking to the tune of close to 9%. let's look at permits, shall we? we were expecting a number 1.16 area. we ended up with 1.22. and that follows 1.15. so that's a plus. that's up over 6%. so a little over 6% on permits. down 9% on starts. and 1.047 million, that sticks

in my mind. that's the lowest level for the year. boy, we have to go back a ways. we have to go back to about march of last year to find a lower number. and of course housing could be the poster child for all the programs, all the policies, all the imf claims, all the u.n. claims, all the big growth claims. because at current rates whether you go up or down 25 basis points, this mortgages, obviously what's wrong with housing isn't what the level of interest rates are. it's most likely how credit is allocated or even a desire to own a home. of course, at some point the government will get reinvolved like they did in the early '90s. at some point, what are the markets doing? 180 were rejected. the 150 were overpopulated in august. here the market sits. maybe the best thing is to keep track of the dollar index.

look at the 15-year chart. we'll have to wait and see and of course the other issue we want to be cognizant of is what's going on overseas. some of that uk data looks pretty good. whether it was brexit or maybe it's our election. sometimes the smart people aren't as smart as they think they are. back to you. >> all right. thanks, rick. let's get more on this data here. and on the big debate on wall street for outlook on gdp growth. joining us, deutsche bank u.s. economist along with chief economist at amherst. joe, i don't think i saw a smile on your face, but i think i saw a smile in your brain when this number came out. right? because you've been saying things are weaker for awhile. this is in line with your thoughts. is this a sign of weakness out there in the economy?

>> the permits actually is a better series. >> and that's up. >> my guess is housing will do okay. but we don't have this cyclicality and we're not getting the multilier we typically saw. to me the reason we get into q3 is because consumer spending which was strong in the second quarter now is reversing and slowing quite dramatically. >> what's your number? i've seen between 2.5 and 3 for consumer spending. first, let me show the rapid update chart. this is the range. we're looking at a median of 2.6% of the economists we tracked. joe is at the bottom there. he's at 1.9%. you're at 1.3% now on your forecasts right now. >> and i've been hesitant to change. the thing is we're in a low nominal growth world with relatively stability product. forecasters should be looking at growth in the low ones. and they consistently over the past year had numbers above two

and it hasn't played out. >> you're also part of the survey. you represent the top end of that range. 3.1%. tell -- why is joe wrong about the is? >> well, for what i can see most of the disagreement about the forecast for the third quarter is really in the trade and inventory pieces. i think most of us agree that domestic demand is pretty steady. which is exactly what it was in second quarter. and i have real domestic demand which is gdp minus inventories of trade at 2%. which is actually a little weaker than the second quarter. so i don't have across the board strength. but what i do see is i see a rebound in inventories after liquidation in second quarter. >> joe, i checked what you were talking about yesterday and i can't -- >> you are talking to me joe this time? you're not talking to -- >> oh, that joe. right, right. >> because i started listening -- for a second i started listening to what you were saying to him.

but now you are -- >> joseph kernen. >> we have been starting off with these very optimistic quarters then moving back down. that seems to be the case. i don't know why that is, joe. is it just that economists continue to believe that there's symptom great i don't know golden ring out there to reach for when it comes to this recovery that always slips away? >> seems that way. partly as the fed has helped shape consensus expectations of economists and the rebound and the recovery and the acceleration is around the corner. so part of it's just old habits die hard. the inventory cycle has gone on for a long time. however, i'd argue there's a risk consumer spending is up in the quarter. >> that's a big deal. >> listen. one of the things i would maybe make a comment and ask you guys is two things. one is productivity. not just this quarter but for longer term. one of the things that has been shocking among our shop and economists is how low

productivity has been. almost to the extent people wonder whether it's not being calculated correctly. i don't know if you have a strong opinion on that. but certainly theoretically if it's employment growth and productivity, if you have productivity at 0.3, it's hard. >> it's not the underlying growth trend. >> this is the thing. growth has been 2% every year for the last four years in a row. low numbers in the first half of the year. now i think we're going to get something a little above 2%. but i think we'll be around 2% for the year. it's something i've been talking about for years. i think joe's right. the fed kind of was very slow to recognize what was going on with productivity. and it's made a fundamental difference in the way we see the economy. potential growth as a result is low. and it turns out we've been probably at 2% we thought that was below trend for most of the expansion. turns out it's probably above trend. which is why the labor market is

where it is. >> but there is a question if you address this -- >> that joe? >> yeah, that joe. >> okay. you're saying joe again. i was trying to address it -- >> i said joe. >> oh, i'm joseph? >> no. joe. >> go ahead. >> is there -- when you say 1.3%, are you marking what you believe the trend growth to be? or do you believe we're weaker than trend and that we come back? is it 2% that's the right in you remember? >> so, yeah, so steve mentioned since the cycle ended, it's been since june of '09. but the last quarter it's been 1.3%. my guess is that's the new trend. steve, if you look at the unemployment, it's been -- >> we don't have time for why that trend is so low and -- >> now you're talking to me again. >> because ann is asking us -- and you know i like ann so we're going to move on. >> thanks to both of you. coming up, microsoft surface

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microsoft surface tablet computers have received one might call a celebrity non-endorsement. new england patriots coach bill belichick criticized the tablets and said he won't use them anymore on the sidelines. that wasn't one of them, was it? belichick said they don't perform consistently. still 5-1 without brady. belichick was spotted slamming down one of the blue microsoft tablets in disgust. this was not at the tablet. it was the way i had team was playing which i said is 5-1. still not happy. they be that's why they do well year after year.

microsoft says they stand by the reliability of the tablets. there he goes. so that wasn't the tablet. he was mad at something. how mad can you get? be a bengals fan. >> did microsoft say they're looking into any issues and looking into a major consumer complaint? >> an investigation. >> rather than saying standing by saying belichick's wrong. coming up, new thinking on treatments for concussions. joan weill will join us ahead of today's women's health symposium in new york as we learn about the long-term effects of head injuries. first as we head to break, though, quick programming note. don't miss starbucks ceo howard shultz on "closing bell" today at 4:00 p.m. eastern time. go after it the same way? y chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities.

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we're used to hearing about concussions in professional football, hockey, also we're now hearing kids suffering some of these violent head injuries while playing sport. meanwhile researchers working to learn more about the long-term effects from concussions as well as possible connections to a neurological disease like alzheimer's later in life. joining us is joan weill. she is cochair of this year's women's health symposium being held in new york city by weill cornell medicine. it's focusing this year on concussions as well as alzheimer's. joining us also is one of the

institution's top neurologists. concussion not as much alzheimer's but you can speak to concussions. >> correct. >> and joan, my first thought also was women's health. okay. what about everybody's health. but it is different. because in the past women have been treated as you put like small men. which i thought -- >> exactly. >> and there are definitely different parameters and different ways to approach the health. >> absolutely. i mean, we present so differently in -- for instance, in a heart attack. women present completely different symptoms than men do. and also, you know, it's very important because women are really very often the gateway to the health of the whole family. >> that is true. if i had to pick one person, i'd have her healthy. >> you have to drag your husband

or spouse or partner to the doctor. your children or your nieces, nephews, whatever. again, you know, women are very important as far as the health care goes. >> i don't think people know. girls are more subject in playing sports as young people to concussions. i don't think you immediately think of that. >> research is now showing in gender match sports such as soccer and basketball, women have an increased risk of having concussion -- >> over men? >> over men. and we think that's related to weaker neck moususcleture. both the numbers of symptoms and duration following concussion. that may just be the way the brain is built or the way impact to the brain following a concussion alters their function. >> so in terms of the future and prognosis, what is the state?

does it matter which part of the bra in? >> it's always important which part of the brain gets affected. what we're learning is that we need to educate the trainers an the coaches and i think this speaks to joan's point and the parents and families. >> parents. >> that the the conversation is sports good for children. but there's a risk and how do you min nice that risk? and i think one of the parts is having the mother in the conversation. they have to help the children balance what is safe and when in doubt, sit it out. one of the important components here is you don't want to play through a concussion or through a headache. and you've got to be respectful of those symptoms. and a lot of times athletes don't want to take a break. >> the sports component of this seems somewhat preventable. awareness of symptoms, wear helmets and some of the higher combat sports. i had two concussions. one was a car accident and one i

was a college cheerleader. is there a way you should be working out your neck or taking certain vitamins? is there anything you can do to lower the instance rate of a concussion? >> you see, that's what part of our symposium is about. what we try to do at the symposium is have our audience walk out with things they can actually learn to do to prevent exactly what happened with you. and that's really part of what we do. and again, to say that, you know, difference in young girls again women are not small men. we are different. very different. >> i think at the national level, prevention is a high priority. and one thing we can do is change the rules of sports. so given the unique vulnerability of the developing brain, to limit tackle football to players that are older than 14. to limit heading the ball in soccer to players who are older than 14. those are steps you can take. but i think as emphasized by the

symposium, things like nutrition as well as relaxation, decreasing stress, as well as exercise. we're starting a program at weill cornell to introduce graded shown to be effective especially in athletes to getting them back on the field sooner. so while you can't prevent every injury, you can promote recovery. >> what we're doing on this particular health symposium is we have dr. gregg pesko, who is a ph.d. and does a lot of research in alzheimer's disease so we are showing the gamut of, you know, people are aging more and living much longer, so they are getting more diseases of the brain. and so that's what we are trying to prevent and people to learn how to prevent that kind of thing. >> right. and it's complicated the difference between dementia and alzheimer's. it's an organ. it's an aging organ when you're 95 you understand your kidneys

don't work as well, those are all semantics. >> and how do we prevent that from happening. relationships are very important. >> and use it or lose it is one of the mantra we have. >> we're going to do jumble. >> a word game we're going to do in a second. >> what has been shown is early concussion and earlier the injury the more likelihood of some neurodegenerative problems but there's only a small fraction of people that go on to have those problems, and it's decades later. it's hard to connect the dots, but there is some biology to people with genetics with increased symptoms, same factor that increases risk of alzheimer's. >> also what's happening with neuroscience now is fantastic because now they can actually look into the brain. you don't have to wait for a person to die. and this is really very, very helpful thing.

>> thanks for all you've done. >> well, thank you. >> for the institute and everything. thanks for coming in. >> thank you, appreciate the time. >> thank you very much. coming up, we'll talk to jim cramer live from the new york stock exchange. we'll be right back. an creates , used by this bank, to protect this customer, who lives here and flies to hong kong, to visit this company that makes smart phones, used by this vice president, this little kid, oops, and this obstetrician, who works across the street from this man, who creates software. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured.

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get down to the new york stock exchange. jim cramer joins us now. you know, we don't really -- intel used to be so cool to talk about, jim. it's still almost a $200 billion company, and i guess it still is, but i thought that company was going to take over the world 15 years ago. and it basically same market cap it was back then. we need it though, right? >> yes. it's funny. you say they do a ten-year review in the conference call where basically talking about the incredible things they've done towards raise gross margins and revenue bursts. but in the end they're still tied too much to personal computers and tied to the enterprise for the cloud. the enterprise hasn't billed out. look, it was a great quarter. stacey smith was right when he came on the air and said that, but the guidance was by their own take lower than the median. i always expect a fourth quarter blowout for intel. they're just not going to give you one. and that really just was the buzz kill. other than that that stock would have been through 40. >> jim, you think salesforce is

going to buy adobe? what did you make of that target list? >> no, they are very good friends. they have a lot of -- look, these are very complimentary companies in the same way workday's on that list. and marc benioff has a great relationship with both workday and adobe. if those companies were to combine, it would be rather amazing because both ceos of workday and adobe love their companies. and i just don't think in the experience i've had with benioff he's not about to take over a company and make it so that a guy like the cfo of adobe leaves, neil bushery, these guys are great friends. excuse me. one thing that's interesting is tablo, i know marc doesn't like, but said it's in play. even had a code name for it. and tablo happened to have a bad quarter. so remember tablo and linkedin had bad quarters at the same time.

linkedin gets bought, tablo nothing happened. >> i was going to ask you whether happy days were here again, i'm told for all the banks because of dodd/frank things are going swimmingly. >> thank you. >> dorm don't miss lloyd blankfein. he'll join david faber live. that's niez e nice the two getting together chlgt accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of at&t, and security that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t. hey, jesse. who are you? i'm vern, the orange money retirement rabbit from voya. orange money represents the money you put away for retirement. over time, your money could multiply. hello, all of you. get organized at voya.com.

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all right. trenner, thank you for joining us. steve liesman, thank you too. >> oh, come on. it was great, joe. >> great, steve. make sure you join us tomorrow. "squawk on the street" is next. ♪ even flow good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange. david faber is at the goldman sachs builders and innovators conference in santa barbara, california. he's going to talk exclusively to lloyd blankfein later today. futures in a range meanwhile ahead of the final presidential debate tonight plenty of earnings, europe relatively flat, road map begins with the debate.